Washington, D.C. — The Labor Department is set to release a long-awaited report on the U.S. job market, which is about seven weeks late due to a government shutdown that hampered data collection. The report will provide insights into employment trends for September, raising questions about how hiring and layoffs have evolved as the economy shifts into fall.

Recent months have seen muted job growth, with employers adding an average of fewer than 30,000 jobs each month during the summer. While companies appeared hesitant to expand their workforces, they also avoided significant layoffs, maintaining a tenuous balance in the labor market. However, Federal Reserve Governor Chris Waller has expressed concerns that this equilibrium may soon change.

In a speech to economists, Waller noted discussions with business leaders who indicate that the job market might be on the brink of stagnation. “Four to six weeks ago, we were still in this kind of no-hire/no-fire mode,” he explained. “Now, they’re starting to talk about layoffs and even plan for them in the future.”

Large corporations have already made headlines with recent job cuts. Amazon announced plans to reduce its workforce by 14,000, while Verizon is set to cut 15,000 jobs. These developments come against a backdrop of evolving economic conditions that have left many employers cautious.

As policymakers prepare for their upcoming meeting, Waller advocated for a reduction in interest rates to stimulate demand and support employment. However, conflicting views within the Federal Reserve complicate the decision-making process. Recent minutes from a Fed meeting indicate a division among committee members, with some suggesting that maintaining current interest rates might be more prudent given persistent inflationary pressures, exacerbated in part by tariffs.

The delay in job market reporting means that crucial data for October and November will not be available before the next Fed meeting, which raises uncertainty regarding future policy directions. Also, the status of the inflation report for October hangs in the balance, leaving analysts and decision-makers in a challenging position.

Despite the discouraging signs, Waller insists that policymakers are still closely monitoring business sentiments. Conversations with major retailers like Target and McDonald’s reveal a trend of consumer caution, particularly among low- and middle-income households. “You just go talk with firms that serve these communities, and they’ll tell you point-blank, they’re just not coming in the door,” Waller remarked.

While government figures on consumer spending are also delayed, anecdotal evidence suggests that only high-income families are currently making substantial purchases, bolstered by substantial stock market gains.

Thursday’s report is expected to give an update on the unemployment rate, which stood at 4.3% in August—slightly elevated from earlier in the year but still low in a historical context. This metric is influenced by both the number of vacant jobs and the pool of available workers, with recent immigration restrictions further constraining the labor supply.

Despite these dynamics, Waller is concerned that the slowdown in hiring may reflect a declining demand for workers, potentially leading to higher unemployment rates in the near future. “There’s definitely a reduction of supply,” he noted. “But to me, that is masking the reduction in demand, and that’s what I’m concerned about.”